Where do you see interest rates in 2 years time?

Discussion in 'Loans & Mortgage Brokers' started by ChrisP73, 9th Oct, 2021.

Join Australia's most dynamic and respected property investment community
?

Residential Mortgate Interest Rate Predictions Oct 2023 (vs Oct 2021)

Poll closed 23rd Oct, 2021.
  1. < +50bps

    43.5%
  2. + 50bps

    34.8%
  3. +100bps

    17.4%
  4. +150bps

    0 vote(s)
    0.0%
  5. > +150bps

    4.3%
  1. ChrisP73

    ChrisP73 Well-Known Member

    Joined:
    5th Oct, 2018
    Posts:
    1,205
    Location:
    Brisbane
    Obviously no one knows the future - but thought it might be interesting to see where peoples views are on interest rates in 2 years time relative to today.

    I tend to think it will either be virtually no increase, ie <+50bps OR a significant increase, ie >+150bps ... ie no middle ground - tending towards really no change.
     
    Last edited: 9th Oct, 2021
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,667
    Location:
    Australia wide
    Good question, but there is no option for the same level as now.
    Are you talking variable rates or the RBA cash rate?

    RAB could keep rates the same with banks pretending there is an increase in costs and putting up their rates
     
    Arthurark and Colin Rice like this.
  3. Alex AB

    Alex AB Well-Known Member

    Joined:
    10th Jul, 2021
    Posts:
    577
    Location:
    Sydney
    I think RBA cash rate will increase before 2024 but should still be below or around 50bps by October 2023. NZ already increased their rate, markets price in UK, Canada for a couple raises next year, US to follow so I don’t think Aus can wait until 2024. But let’s see.
     
    Terry_w likes this.
  4. Alex AB

    Alex AB Well-Known Member

    Joined:
    10th Jul, 2021
    Posts:
    577
    Location:
    Sydney
    Yes, I also think banks will raise it before RBA / out of RBA cycle. When RBA bond purchase program finishes early next year, the cost of funding will start increase for banks too.
     
  5. Colin Rice

    Colin Rice Mortgage Broker Business Member

    Joined:
    9th Jul, 2015
    Posts:
    3,183
    Location:
    Perth
    Will be interesting to see the regulator's reactions to the latest attempts at curbing the market with DTI restrictions. It will mostly affect those that can least afford it and need it the most, as per most government regulation outcomes in the financial sector.

    The only other lever that they can pull is the interest rate one.
     
  6. ChrisP73

    ChrisP73 Well-Known Member

    Joined:
    5th Oct, 2018
    Posts:
    1,205
    Location:
    Brisbane
    Same level would be the first option, ie virtually no change.

    Intent was change to actual borrowing rates available for residential mortgages, not RBA overnight rates for banks - are you a bank @Terry_w ;)
     
  7. ChrisP73

    ChrisP73 Well-Known Member

    Joined:
    5th Oct, 2018
    Posts:
    1,205
    Location:
    Brisbane
    I think there are plenty of other options available to curb lending in targeted ways other than interest rate rises, if so desired.
     
  8. Beano

    Beano Well-Known Member

    Joined:
    7th Apr, 2016
    Posts:
    3,345
    Location:
    Brisbane
    Will there be a prize in October 2023 for the people that guess right ?:p
     
  9. ChrisP73

    ChrisP73 Well-Known Member

    Joined:
    5th Oct, 2018
    Posts:
    1,205
    Location:
    Brisbane
    Pretty sure you're ok @Beano, but let me know in Oct 2023 if you guessed right and I'll give you a tick.
     
  10. 2FAST4U

    2FAST4U Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    2,304
    Location:
    Democratic People's Republic of Australia
    +100bps. Once interest rates start moving I think they'll come in quick succession, particularly if the 'transitionary' inflation remains stubborn. Shipping rates to Australia are ridiculous atm!
     
    ChrisP73 likes this.
  11. HenryC

    HenryC Well-Known Member

    Joined:
    9th Oct, 2021
    Posts:
    82
    Location:
    Perth
    No one can predict the future but most people think it wouldn't go any lower than the current rate?
     
    ChrisP73 likes this.
  12. ChrisP73

    ChrisP73 Well-Known Member

    Joined:
    5th Oct, 2018
    Posts:
    1,205
    Location:
    Brisbane
    Well we all know the answer now.

    Was 0.1% (wow!)
    24 months later is 4.1%

    400bps. Check the voting. We think we're all so smart

    FWIW @Beano was the only voter with a clue. Stacks up.
     
    craigc likes this.
  13. ChrisP73

    ChrisP73 Well-Known Member

    Joined:
    5th Oct, 2018
    Posts:
    1,205
    Location:
    Brisbane
    There you go ;)
     
  14. flygo

    flygo Member

    Joined:
    18th Jun, 2015
    Posts:
    14
    Location:
    Sydney
    vanguard predicts cash rate will be 50bps lower by the end of 2024.